Life insurance is a contract made between you, the insured and the insurance company. The policy protects you against any unforeseen circumstances that may take place anytime in your life. It also helps you cover risks such as theft, property, natural calamities like flood, earthquake, etc. It provides financial security for your family members when the earning member is no more there in the family.
The cost of life insurance policy depends on the age and the financial condition of the person who is buying the policy. Young people purchase life insurance to provide a source of income for their family if anything happens to them all of a sudden. The old people buy this policy to leave a certain amount of money for their family when they’ll no more be there. The policyholder has to pay the premium amount on time in order to enjoy the benefits of the policy.
Protect your Personal Finances:
Reasons why you should purchase life insurance
Life insurance policy helps you protect your personal finances in a better way. Read on to know the 5 reasons why you should purchase this policy.
1- Provide income for the family – Life insurance provides income for the family. If your family members depend entirely upon your income, then buying life insurance policy can be one of the best options to protect them in case you pass away. This policy will replace your income when you are no more with them by providing support to your family members.
2- Coverage for expenses – Life insurance helps you cover the costs of your funeral expenses. This policy is made very carefully to provide funds for mortgages and other expenses. The medical expenses which are not covered by health insurance policy are also covered in this policy.
3- Build savings plan – Life insurance that you may purchase, can be a source for your savings plan. There are some insurance policies that make a cash value for withdrawal upon the request of the owner. The savings plan also offers interest as tax deferred and if the money is paid as death claim, then the interest may be tax exempt.
4- Create inheritance – Life insurance helps you create inheritance for your family members. So, if you do not have any asset to give your family members, then you can create inheritance by naming your family members as beneficiaries in your insurance policy.
5- Make contribution for charity – When you make charity as beneficiary for your life insurance policy, you make a good contribution than if you donate cash of your policy’s premiums. When you donate term life insurance policy, it permits you to deduct cost of the premium from your taxes. But, when you donate for a whole life insurance policy, you can deduct the policy’s cost value and also whole life insurance policies premium cost. In both these policies, in case you pass away, the policy will move to the charity that you’ve selected.
You should buy life insurance policy as soon as you can so that you can protect yourself from any unexpected situation. This way, you’ll also be able to protect your finances more efficiently. However, before purchasing any policy, it’s advisable that you shop around very carefully and look for the best rate and plan that suits you the best. You should also keep in mind as to how much money your family members will require to maintain their lifestyle in your absence. This in turn, will help you purchase the right policy and, in turn, get the required amount of coverage.